BIR Ruling No. 011-11

January 19, 2011 BIR RULING NO. 011-11 101 (A) (3); BIR Ruling No. 452-93; BIR Ruling No. DA-452-05; BIR Ruling No. DA-028-98 Luz B. Victoria-Jose R. Mercado Memorial Foundation, Inc. 247 Anahaw St., Ayala Alabang, Muntinlupa City Attention: Rev. Fr. Gabriel P. Mercado II Gentlemen : This refers to your letter dated September 28, 2010 requesting for tax exemption on the donation by Ambassador Daniel C. Victoria, Jr. of his real properties to Luz B. Victoria-Jose R. Mercado Memorial Foundation, Inc. (or LBV-JRMMFI). Documents submitted show that Daniel C. Victoria, Jr. (TIN 131-944-178) is the registered owner of a house and lot located at 247 Anahaw St., Ayala Alabang, Muntinlupa City described as Lot 10, Block 7 of the subd. plan Psd-04-002263 with an area of seven hundred (700) square meters and as evidenced by Transfer Certificate of Title (TCT) No. 29501 of the Registry of Deeds for the City of Muntinlupa. On the other hand, LBV-JRMMFI (TIN 007-612-531-000), is a charitable non-stock non-profit association registered with the Securities and Exchange Commission (SEC) under SEC Registration Certificate No. CN201002244 dated March 17, 2010. On August 27, 2010, a Deed of Donation of Real Property was executed by the donor transferring in favor of LBV-JRMMFI the aforesaid land with the improvements existing thereon. In reply, please be informed that gifts in favor of educational and/or charitable, religious, cultural or social welfare corporation, institution, accredited nongovernment organization, trust or philanthropic organization or research institution or organization is exempt from the payment of the donor's tax pursuant to Section 101 (A) (3) of the Tax Code of 1997, as amended, subject to the condition that not more than thirty percent (30%) of said gift shall be used by the donee for administration purposes. (BIR Ruling Nos. 452-93 dated November 19, 1993) aCcEHS Inasmuch as LBV-JRMMFI is a charitable organization, any donation to it is exempt from the payment of donor's tax pursuant to the above provisions of the Tax Code subject to the condition that not more than 30% of said gift shall be used by the donee for administration purposes. In case of donation of real property, the Register of Deeds shall annotate this condition at the back of the title because failure to comply with the said condition shall be a ground for the revocation of the donation pursuant to Article 764 of the New Civil Code. Section 185 of Regulations No. 26, otherwise known as the Revised Documentary Stamp Tax Regulations, implementing Title VII of the Tax Code, provides that conveyances of realties not in connection with a sale, to trustees or other persons without consideration are not taxable. (BIR Ruling No. DA-452-05 dated November 8, 2005) Accordingly, the deed of donation is likewise not subject to the documentary stamp tax prescribed under Section 196 of the Tax Code, as amended, but only to the documentary stamp tax of P15.00 imposed under Section 188 of the same Code. (BIR Ruling Nos. 252-93 dated January 17, 1993 and DA-028-98 dated January 29, 1998) This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue